Social, Yes. Security, Not So Much

Dave SchulerFebruary 19, 2013

No country is as much in need of a system of social insurance as China. Traditionally, in Confucian Chinese society, children supported their parents in their parents’ old age. The “One Child Policy”, introduced in 1978 turns 35 this year along with the lonely singletons born under that policy. The parents of those children are nearing retirement age. Assume a couple with one child. Those two people also have the responsibility for as many as four parents. A family of six adults and one child is quite a financial burden for average Chinese paychecks. It’s even worse in rural areas.

In 2009 China introduced a system of universal social insurance for the very first time. Unsurprisingly, the system is already drastically underfunded to meet its obligations.

If you don’t feel like clicking over there, here’s a shorter version: China doesn’t have the civil infrastructure for universal social insurance. Or for a lot of other things that Westerners take for granted. Like the ability to enforce international systems of intellectual property law, for example.

Bad news for maintaining economic growth in China, IMO. Having an impoverished population doesn’t usually work too well. China will be even more dependent on foreign markets. The idea of China being this economic monster is becoming harder and harder to believe.

This should be a lesson to all who believe the “sky is falling” crowd. The predicted overpopulation would NEVER have occurred. Now China has an overpopulation of single men who will never marry. I would suggest a large population of men with no females to moderate the natural aggressive nature of men is not a desirable situation.

Is it any surprise that China is obtaining an arsenal of fun new toys.

Is it any surprise that China is obtaining an arsenal of fun new toys.

Another reason to be skeptical of China sustaining its economic growth. Sure building a tank is counted, by some to GDP, but it is a completely unproductive addition to GDP….since tanks don’t get together and produce baby tanks.